Rise in Bribery Feared In Shs1.1 Trillion Road Funds

Published on 8th December 2008

As government starts to spend the Shs 1.1 trillion allocated to the road sector this financial year, allegations of flaws in the bidding process have started to surface. Some contractors say that government officials are using the some times stringent bid requirements to sieve some companies in favour of those that offer bribes. 

“You see, what the government official does is to get a company and go through the requirements in the bid document. They [government officials] advise the company what to bring during the bidding, which some of us tend to ignore,” says our source. 

Bid documents now require the provision of the powers of attorney, provision of the history of contract non performance, a valid bid security, specific experience and personnel capability among others. Some of the requirements, like the specific experience of the personnel and their capability, do not have clear cut benchmarks for assessment and are open to manipulation, industry players say.

A newly Constructed Road
Edgar Agaba, the Executive Director of the Public Procurement and Disposal of Public Assets Authority, says that those complaining about the bid documents have no basis for argument. He says that the bid document has about 30 sections and it follows international best practices. “Many of these local firms are weak financially. And that is why they tend to fail on the bidding process,” he says. 

However, The Weekly Observer has seen some tendering results, which show that many of the firms that apply for construction works have bid security of more than Shs120 million from top banks in Kampala. In an earlier interview with The Weekly Observer, the Minister of Works, John Nasasira, said that the perception of corruption had gone too far. “You say the tendering team takes 20%, supervisors take something, and the minister takes 20%? I can’t say there is no corruption but I can say 90% of that is not true.” 

Some companies, our sources say, have missed out on lucrative contracts simply because they quoted lowest. Government officials find it difficult to award a firm with a lower price, arguing that the company with the cheaper quotation failed to meet the bid requirements. One such example came up with a tender the Ministry of Education and Sports awarded mid this year. The tender was to build a vocational school. 

In that job, Dott Services and COIL Limited were awarded tenders to execute two different jobs on the same site. However, questions arose after Dott Services won the tender despite quoting a price that was about Shs900 million higher than COIL’s offer. The two companies had each bided for both jobs. In eliminating the other firms that had a cheaper price, the ministry of education argued that the bid documents did not meet the requirements. 

M/s HL Investments Ltd early this year lost out on a job to construct offices and staff houses in Lake Mburo Conservation area because the Uganda Wild Authority disqualified the company on the basis of the bid security being not valid 28 days to the expiry of the bid. 

Our source says that ministry officials sometimes ask for up to 5% of the value of the contract as a kickback, with that amount likely to go up in the coming months. For example, if the repair of a road costs about Shs2 billion, a ministry official is said to demand for as much as Shs100 million before signing on the dotted line. “Is there anything you can get in Kampala without offering a bribe?” asks a top industry source who does not want to be named.  

With the ministry of finance entering the early stages of executing its Shs1.1 trillion budget funds for roads, a record amount that a single sector has ever received in Uganda’s national budget, officials in the construction industry say that the amount of bribes is likely to go up. Local firms who cannot match these bribes fees are likely to be pushed to the fringes of the sector, our source said.

By Jeff Mbanga

Jeff Mbanga jeff@observer.ug writes for The Weekly Observer

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